Wednesday October 26, 2011 2:14 pm

Amazon hurrying Kindle Fire production in response to massive demand

Amazon said Tuesday that Kindle Firepre-orders exceeded expectations and the company is now ramping up production on the tablets.

"September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days," Jeff Bezos, founder and CEO of Amazon.com, said in a statement. "In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned."

Despite the demand for its newest Kindles, Amazon's earnings for the quarter came in below expectations, Bloomberg reported, and shares dropped 19 percent in late trading.

During an earnings call with reporters this afternoon, Amazon CFO Tom Szkutak said the company thinks about the Kindle in terms of its lifetime value. "We're not just thinking about the economics of the device and its accessories; we're thinking about content," he said.

Customers are buying "quite a bit of Special Offers devices," Szkutak continued, referring to the cheaper Kindles that feature ads.

"What we're seeing certainly is that once customers purchase a Kindle and are carrying around this really massive selection at their fingertips, they're buying more content," he said. "As we think about the lifetime value, we're thinking very specifically about ... how do we get the absolute best device in customers hands."

With the Kindle Fire and its new Kindle devices, Amazon expects a "record" upcoming quarter. "We're getting ready, as you'd expect, for just a great holiday season for customers."

When asked about its cloud services, like Cloud Player and Amazon Prime, Szkutak said "both are very early" but the company is "happy with the traction we're getting."

"Customers absolutely love it," he said of Amazon Prime video. "We have a lot of customers who are requesting free trials and then converting [to the paid version] based on those trials."

Amazon is competing with Netflix on the streaming front, with both investing heavily in their respective libraries. Amazon recently purchased LoveFilm across the pond, which offers a Netflix-like experience. This week, Netflix announced plans to expand into the U.K. and Ireland next year. When asked about it, Szkutak didn't address Netflix specifically, but said Amazon will continue to invest in LoveFilm and that the "business is doing very well."

This article, written by Chloe Albanesius, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.